THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANNOUNCER: Nearly 33 years after Watergate, the one great mystery remaining from the scandal may be solved. A former FBI offical says in a magazine interview that he's Deep Throat. Unmasking Deep Throat's identity has been the capital's favortite guessing game, and just about anyone who worked in the Nixon White House was fair game. QUESTION: ...you don't deny it, then?

DONALD RUMSFELD, SECRETARY OF DEFENSE: (Laughs.) That is wonderful. That is amusing.

ANNOUNCER: We'll take a look at the only secret in Washington that actually stayed secret.

After some rough treatment last week on Capitol Hill, President Bush urges Congress to pass his agenda.

PRES. GEORGE W. BUSH, UNITED STATES: The American people expect people of both parties to work together. They look forward to the Congress setting aside partisan differences and getting something done. So do I.

Well, no sooner had President Bush ended his news conference today in the White House Rose Garden than a political drama from three decades ago stormed back to center stage. The president took questions for almost an hour this morning, addressing everything from the conflict in Iraq to the political battles over his judicial nominations. But it is today's word that former FBI official W. Mark Felt has publicly identified himself as the mysterious Watergate source known as "Deep Throat" that has this city abuzz.

We'll have complete coverage of the president's news conference later in the program, but we start with the question that has all of Washington talking. Has the best-kept Watergate secret finally been revealed? Our coverage begins with CNN senior political analyst Bill Schneider.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN SR POLITICAL ANALYST: A mystery for more than 30 years has been solved, or has it?

"I'm the Guy They Called Deep Throat," that's title of John D. O'Connor's sensational story in the new "Vanity Fair." The title is a quote from W. Mark Felt, number two man at the FBI in the early 1970s. "On several occasions," O'Connor writes, he confided to me, "I'm the guy they used to call Deep Throat."

Felt was in a position to know a great deal about Watergate, having headed the FBI's investigation of the 1972 break-in in the Democratic National Committee's Watergate offices. He was also in a position to feel aggrieved by the Nixon White House which Felt says, tried to stymie his investigation at every point with false leads, non-cooperation, and threats. The motive behind Deep Throat's decision to go to the press, according to the "Vanity Fair" article? "Felt came to see himself as something of a conscience of the FBI."

Felt has been a leading Deep Throat suspect for many years. A 1992 "Atlanta Monthly" article by former "Washington Post" writer James Mann says Felt could well have been Deep Throat. A 2002 book by another "Washington Post" reporter, Ronald Kessler, "The Bureau: A Secret History of the FBI," said Felt was Deep Throat. White House tapes from 1972 recorded White House aide H.R. Haldeman telling President Nixon that most of the Watergate leaks were coming from Felt.

Some questions: if Felt really is Deep Throat, why did he remain silent for the last 30 years? Bob Woodward told Larry King last year...

BOB WOODWARD, "WASHINGTON POST": And I think, once people see who it is and exactly what happened, will understand why the super- secrecy and the confidentiality and why it was not revealed for such a long time.

Reporter: The "Vanity Fair" article quotes Felt's son as saying, "his attitude was, I don't think being Deep Throat was anything to be proud of. You should not leak information to anyone." Felt's grandson told the author, "He was concerned about bringing dishonor to our family. It was more about honor than about any kind of shame. To this day, he feels he did the right thing."

OK, so why did Felt decide to reveal himself now? O'Connor says Felt revealed the truth casually, almost inadvertently, to close friends and family members. He confided his identity to a close social companion who shared the information with Felt's daughter, Joan. Joan is reported to have confronted her father saying, "`I know now that you're Deep Throat.' His response? `Since that's case, well, yes, I am.'"

The "Vanity Fair" article describes pressure from family members on Felt, who is now 91 and ailing, to come forward. They wanted him to establish his legacy on his own terms. They also told him the revelation might bring in some money that could help the family. Though "Vanity Fair"'s author says the Felts were not paid for their cooperation. Is the report believable? It has a lot of detail. It depicts a continuing close relationship between Felt and Bob Woodward, and this from Felt's son.

MARK FELT, JR., ALLEGED DEEP THROAT'S SON: "We believe our father, William Mark Felt, Sr., was a -- was an American hero. He went well above and beyond the call of duty, at risk to himself, to save this country from a horrible injustice."

(END VIDEOTAPE)

SCHNEIDER: In the end, it all comes down to a single source: an elderly man whose memory is reported to be failing. Woodward has issued a statement saying neither he or his "Washington Post" colleagues are going it say anything regarding the identity of Deep Throat. Carl Bernstein says, quote, "it is not our intention to identify Deep Throat until his death," unquote. A prominent Watergate figure tells CNN, quote, "I've got grave doubts about this story. If Felt is Deep Throat, then wouldn't he have been able to release Woodward and Bernstein from their confidentiality agreement? " Good question. Judy?

WOODRUFF: It is a good question. And, Bill, what are we to make of the fact that this is coming from a man, 91-years-old, failing memory?

SCHNEIDER: Well, that's all we know. I mean, we've never met the man. The author has. He trusts him and he said that he reported this some years to go a close social friend as well as to his family.

There's also one other question: if Mark Felt is not Deep Throat, you might think Woodward and Bernstein might deny the report.

WOODRUFF: Former White House aide David Gergen has been an adviser to four U.S. presidents including his tenure as a special assistant to President Richard Nixon. David Gergen is currently a professor at Harvard's Kennedy School of Government. He joins me from Cambridge, Massachusetts, to talk about today's report about Mark Felt and Deep Throat.

David Gergen, your name was event on possible list of Deep Throat identities.

DAVID GERGEN, FMR. NIXON WHITE HOUSE ADVISER: Well, Judy, if you took all the people that -- who had been identified as Deep Throat candidates, you could fill about half of that stadium for the Washington Nationals. You know that.

WOODRUFF: What do you make of all of this? Do you believe, based on everything you've read, that this is the man? GERGEN: I think there's some small question now, but I'm highly persuaded that this is the fellow. He has come forward. There's evidence in this article that Bob Woodward has maintained an especially close relationship with him over these last few years. Went out to see him in California in recent years, and more than that, Mark Felt has been on a short list for everybody. Jack Limpert wrote a piece back for the "Washington," back in 1975, August of '74, saying all roads led to Mark Felt.

Why? Well, because the -- there are two things we knew about whoever Deep Throat was. One, it had to be someone with access to investigatory records and that either had to be someone in the investigatory agencies like the FBI, possibly the CIA or the Pentagon, or possibly high up at the White House. But most likely the FBI. And then secondly -- and Mark Felt that was person. He was number two at the FBI in 1972-73.

But second question always was, Judy, what would the motive be for doing this? Especially for someone in law enforcement, why would you go to the press, when after all your own agency is -- in effect going to be doing the investigation leading the prosecution? And that I think we don't know the answer to right now. If -- assuming it's Mark Felt, and I'm persuaded that it was, why would he do it? He said he did it out of matter of conscience. Well, perhaps that's right. Perhaps he was being obstructed by the White House.

But you know, Judy, back in those days, there were a lot of vendettas in the Hoover White -- in the Hoover FBI against Richard Nixon and his lieutenants. There were a lot of angry recriminations going on. Mark felt -- may have felt -- believed he was passed over to be number one. More importantly, there's a lot of evidence that he and the Hoover people felt that Richard Nixon and his men were trying to dismantle the Hoover operation, after Hoover died in may of '72.

Perhaps there was some deeper kind of secret, you know, the kind of Oliver Stone secret, that's to say, that we don't even know what it might be. There are a lot of reasons why there might be vendettas and a -- someone high up in the FBI at that time could have been trying to bring down the president of the United States.

WOODRUFF: All that is plausible, David. What about, though, the notion that after all these years, this man is essentially releasing himself from the pledge that this would remain a secret until after his death?

GERGEN: Well, that was a pledge taken by Bob Woodward and Carl Bernstein and Ben Bradley of the "Washington Post" that they would not reveal. I don't think we've ever known that Deep Throat said he wouldn't reveal. We did go through a flurry of interest in this story, as you'll recall, Judy, about, what was it, three months or so? When it was said that the person who was Deep Throat was deeply ill and might die and we would soon know the name.

So, there are a lot of reasons if the man is 91 years old, why he and his family might want to get the story out, and control the story while he's still alive as opposed to having him die and then have it controlled by others. I can see the motive -- I can see much more easily the motivations for getting the story out now that he's 91, and as Bill Schneider pointed out, one of the reasons that Bob Woodward may still be protecting his identity is, if he felt that Mark Felt is of failing health and may have failing memory and he feels the family is forcing the identity into the public's fear against Mark Felt's wishes. In that case, he, Bob Woodward, would continue to honor those wishes. So, I don't think we know -- there are aspects of this story we don't know the answers to yet, but I think that -- I think we probably unlocked the big mystery, and is, who was it? I think it opens the way for a lot of secondary questions that -- why in the world did he do it? What was behind it, and then, there's this third question about, well, why now?

WOODRUFF: You're right. It is all fascinating. And the point you make about this could be something that the family is forcing on him. That's something that really, as outsiders, it's almost impossible for us to know.

GERGEN: Exactly. And I -- some secrets we're better not knowing the answers to. I do think would it go to know, if we could figure out, what was the motive? I think we should leave the family to their privacy, but I think it's in the public interest to know, why in the world would he do this? Since he was the No. 2 at the FBI, presumably was in a position where he could have brought this to justice within the legal system. Why would he feel it necessary to go to the press and reveal that, what after all were a secret, government secrets that were not to be let out? It's against the law to reveal that stuff.

WOODRUFF: Yes, and it would be so interesting to know what Woodward and Bernstein -- if it is Mark Felt, what they think his motives are. David...

GERGEN: Yes.

WOODRUFF: Why does it matter that we know who this individual was?

GERGEN: Well, partly because it's a big guessing game. It's been one of Washington's parlor games, as you well know, for more than 30 years. But, partly, I think this, after all, was one of the most shameful episodes in American political history. It's our only time we've ever had a president leave the office in disgrace. A lot of things happened because of that. You know, there were a lot of calamities. I think it sort of had our repercussions well beyond for the office of the presidency.

I think we all want to know for the historical record. It's like why did John Wilkes Booth do what we did? And who was responsible and who was in the gang who was around him? You know, some of those mysteries are still out there.

I think here, this was one of the most important political episodes of the 20th century in America. And we need all the facts. We need to know exactly what happened. We need to -- I think our curiosity is such that we just -- it's better for the public record for understanding how the system works and how we are as a people if we know.

WOODRUFF: David Gergen, who was a special assistant to President Richard Nixon. He's now at Harvard University. David, thank you very much.

GERGEN: Thank you, Judy.

WOODRUFF: We appreciate it.

Well, as David just mentioned, it has been the biggest guessing game here in Washington for decades. Just who was Deep Throat?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I don't have the slightest idea.

UNIDENTIFIED FEMALE: No.

(END VIDEO CLIP)

WOODRUFF: Coming up, we'll take a closer look at one of the few secrets here in the nation's capital that has stayed just that -- a secret, perhaps, until today.

Plus, President Bush takes questions and sends signals to Congress.

(BEGIN VIDEO CLIP)

BUSH: I think we need to get the bill off of the floor, into conference, resolve their differences, and get me a bill before the August recess.

(END VIDEO CLIP)

WOODRUFF: But will today's talk help the president push his agenda through Capitol Hill?

(COMMERCIAL BREAK)

WOODRUFF: The questions surrounding the Watergate source known as Deep Throat have been around for three decades and they have captivated Washington.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Judy, as you know, Deep Throat has been the called the most famous anonymous source in history. And certainly he is the source of one of Washington's most enduring guessing games.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Washington, D.C., motto? We can't keep a secret here. Except this one. UNIDENTIFIED MALE: Do you have any clue as to who Deep Throat could be?

UNIDENTIFIED MALE: No, I don't. I have no idea.

UNIDENTIFIED MALE: No idea.

CROWLEY: It remained a secret for 32 years, dividing the world into two parts: those who didn't know who Deep Throat was...

UNIDENTIFIED MALE: Any idea who Deep Throat could have been?

UNIDENTIFIED MALE: No, I don't have the slightest idea.

UNIDENTIFIED MALE: You deliver to this building a lot?

UNIDENTIFIED MALE: Yes. Everyday.

CROWLEY: And those who really don't know who Deep Throat is.

UNIDENTIFIED MALE: You know about Deep Throat, right?

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED MALE: A little before your time?

UNIDENTIFIED FEMALE: Yes.

CROWLEY: Deep Throat, after a porno movie of the same name, was a source who pretty much brought down a presidency.

UNIDENTIFIED MALE: Oh, it was probably Henry Kissinger.

CROWLEY: Definitely not Kissinger, laughs a friend. Kissinger would never go to a garage, which is where Deep Throat would meet reporter Bob Woodward.

UNIDENTIFIED MALE: I made a little list. Alexander Hague (ph)? How about Diane Sawyer?

UNIDENTIFIED MALE: I think you got it.

CROWLEY: It was a running parlor game for three decades. Who was Deep Throat? At least four people actually know: Deep Throat, then "Post" editor Ben Bradley, reporter Carl Bernstein and Woodward.

UNIDENTIFIED MALE: Any clue as to who Deep Throat is?

UNIDENTIFIED MALE: Nope.

UNIDENTIFIED MALE: Offer a guess?

UNIDENTIFIED MALE: They haven't shared that with us in the news room.

UNIDENTIFIED MALE: How come? UNIDENTIFIED MALE: Because it's a secret.

CROWLEY: Woodward, Bernstein and Bradley say they'll still keep the secret until Deep Throat dies, which means you can rule out all the dead people. Everyone else...

DONALD RUMSFELD, DEFENSE SECRETARY: You really are scraping the bottom of the barrel.

CROWLEY: ...is fair game.

UNIDENTIFIED MALE: SO you don't deny it, then?

RUMSFELD: That is wonderful. That is amusing. I'd heard every name in the world except -- no, I was kind of busy running the economic stabilization program and was not really engaged in that process.

UNIDENTIFIED MALE: I'll take that as a no.

CROWLEY: Certainly, Mark Felt fits the sketchy profile of what we do know. Deep Throat was a scotch drinking, chain smoking combat vet with access to information from the FBI, the White House, the Justice Department and the committee to re-elect president. They should have made a movie out of this. Oh, wait.

UNIDENTIFIED MALE ACTOR: No, I have to do this my way. You tell me what you know, and I'll confirm.

CROWLEY: They did.

(END VIDEOTAPE)

CROWLEY: Felt had always been the leading candidate among Watergate connoisseurs. The "Vanity Fair" article and he and Deep Throat are one in the same takes a lot of the fun out of the parlor game, but without confirmation from Woodward, Bernstein or Bradley, people will stay play -- Judy.

WOODRUFF: Why has this, or did it, depending on what's the case, remained a secret for so long?

CROWLEY: Well, it's remained a secret for so long, I think, because the pact that the reporters made, as we can see now, is sacrosanct to those reporters, and indeed to Ben Bradley. And because from what we're hearing about Mark Felt, he didn't want it out. So if you have people who don't want to talk, it's amazing how a secret can hold.

WOODRUFF: Which isn't always the case with other information.

CROWLEY: Almost never anymore. Almost never. So, pretty unusual.

WOODRUFF: Candy Crowley, thank you very much.

CROWLEY: Sure.

WOODRUFF: Appreciate it.

Just ahead, a new book offers a behind-the-scenes' look at the Clinton White House, including, the author's inside account of a strategy meeting in the early days of Hillary Clinton's 2000 Senate campaign.

(COMMERCIAL BREAK)

WOODRUFF: Checking the political bytes on this Tuesday, a new book by "Washington Post" reporter John Harris is the latest to promise readers a behind-the-scenes' look at the Bill Clinton White House. In an excerpt featured in today's "Post," Harris outlines a strategy meeting for Hillary Clinton's 2000 Senate campaign, which was attended by the president.

While pouring over poll data, President Clinton reportedly said to his wife, quote, "Women want to know why you stayed with me," with what the author describes a half-smile, Mrs. Clinton says in response, "Yes, I've been wondering that myself." The president responds, quote, "Because you are a sticker. That's what people need to know. You're a sticker. You stick to the things you care about."

The book's author, John Harris, will be my guest tomorrow here on INSIDE POLITICS.

Former Bush campaign pollster Matthew Dowd has a new assignment. Bloomberg News reports that the NBA has hired Dowd to suggest ways to improve the league's image and to help professional basketball attract new fans. NBA television ratings have slumped this season, along with sales of league merchandise.

In Spokane, Washington, the city council is scheduled to vote later today on a resolution that calls on the mayor to resign. Mayor Jim West can only be removed from office, however, through a recall vote. West has refused to step down despite two investigations that he misused his office by offering jobs to men he met in a gay chatroom.

It was one of the biggest scandals ever to shake Washington and the nation. When we return, a closer look at Watergate from our Bruce Morton, who covered the scandal as it unfolded.

Plus, with lawmakers on a break, President Bush goes before cameras. But is he getting any closer to getting his agenda passed to Congress?

(COMMERCIAL BREAK)

WOODRUFF: A little before 4:00 here on the East Coast. And as the markets get set to close on Wall Street, I'm joined by Kitty Pilgrim in New York with "The Dobbs Report." Hi, Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Hi, Judy, thanks. Well, we have the Dow Industrials down after a three-day weekend. We're down about 67 points right now. NASDAQ a quarter of 1 percent lower.

The big story we're following today -- remember the Enron case? Well, the Supreme Court has overturned Arthur Andersen's conviction for destroying documents. Arthur Andersen, of course, was the accountant for Enron. Now, the court threw out the 2002 decision because the jury instructions were too vague. This is only a symbolic victory for Andersen, which was torn apart following that conviction and nearly all of 28,000 employees lost their jobs.

(BEGIN VIDEO CLIP)

RICHARD SAMP, WASHINGTON LEGAL FOUNDATION: The government was looking for an easy mark. It wanted to make headlines. The lesson here is prosecutors ought to spend their time digging out the real scandals and going after the people who are really culpable, rather than trying to make easy headlines.

(END VIDEO CLIP)

PILGRIM: We'll have more on that story on "LOU DOBBS TONIGHT." Be sure to tune for that.

Also, a trade dispute between the United States and Europe. The European Union is filing a countersuit with Boeing. The E.U. claims that Boeing gets illegal aid from Washington, but the U.S. says the E.U. gives illegal subsidies to France's Airbus, which is a major competitor to Boeing. Now, there are concerns that if the subsidies are cut, it could translate into higher costs for the airlines and ultimately the passengers. So that's the worry there.

United Airlines, its machinist units, they have agreed on a five- year contract, so the possibility of a strike is over. The machinists are 20,000 employees. And United's much smaller mechanics union also came to an agreement.

Coming up, 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," Mexican students literally crossing the border illegally each morning to attend public schools in Arizona. The state superintendent tells us how he's cracking down on that.

Also, violent protests breakout during a speech by Minuteman co- founder James Gilcrest. He'll give us his perspective on that.

Plus, Chamber of Commerce head Tom Donahue says CAFTA -- he says it's a good deal for the country. He explains why. All that and more, 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," but for now, back to Judy Woodruff.

Judy?

WOODRUFF: Thank you, Kitty. We'll be watching. And, right now, back to INSIDE POLITICS. It has been Washington's best-kept secret, and the subject of near endless speculation: who was the mystery source with inside knowledge of the Nixon White House, who repeatedly tipped off Watergate reporters Bob Woodward and Carl Bernstein? Now, there may be an answer. Former FBI official W. Mark Felt, who is now 91 years old, has told "Vanity Fair" magazine that he is the source who became known as Deep Throat. In response, Woodward and Bernstein today refused to confirm Mark Felt's claim. They said they would honor their long-standing pledge not to identify Deep Throat until after he dies.

The Watergate break-in did much more than lead to the fall of a sitting U.S. president, it also helped to change the way Americans viewed their government and its leaders. CNN's Bruce Morton has more.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT: What was it like? First, you knew it mattered, not like the highway bill or the farm bill. Your kids would read about this in the history books, so you had to get it right. It was unique because it was a story that wouldn't die. Deep Throat led Woodward and Bernstein to the money, money which came from President Richard Nixon's reelection campaign. James McCord, ex-CIA, one of the burglars, told Judge John Sirica there was a cover-up.

And then the fateful day when the Senate Watergate Committee called a man named Alexander Butterfield. Who's he, we all wondered. Well, he was a former Nixon aide who revealed, yes, there was a taping system in the White House. It mattered because it shocked a lot of Americans. Their president would lie to them. The Vietnam War was already teaching us that, and the tapes themselves shocked people. The president, the leader of the free world and his closest advisors, cussing like high school students after a six pack of beer.

(END VIDEOTAPE)

MORTON (on camera): Those two events, Vietnam and Watergate, fundamentally changed how Americans look at their politicians. We became cynical about them, seeing them as sleazy men, out for themselves, not us. That attitude still lingers. Well, in fact, politicians are probably about as honest as any other group, bricklayers, TV reporters, whomever. Watergate shocked people, too, because the president's men thought they could get away with it, and because they thought that was what mattered, not telling the truth to the voters. They probably could have gotten away with it, I've always thought, if Richard Nixon had burned the tape, not gone to court about it, just done it. They were, finally, after Deep Throat and all the rest, what did him in.

What was it like? We were covering something the country took very seriously. Total stranger would jeer at you or praise you on the street. Most of us got a few angry phone calls. Some of the voters were die-hard Nixon loyalists; most followed the story and believed what the news media told them, and when Richard Nixon waved his famous good-bye wave and boarded the helicopter, some Americans were sad, but most heaved a huge sigh of relief. Our long national nightmare, new President Gerald Ford said, is over. The echoes still lingered, of course, but the sad disappointing story had finally ended. Judy?

WOODRUFF: Bruce, it is so hard, I think, for young people we know who work here at CNN and other news organizations to even imagine what Watergate was like, to have a White House come undone, an administration come undone, because of some news reporting.

MORTON: Well, in the first place, because of the White House. I mean, it was the president who was saying, break into this. You know how many times did he order them to break in to Brookings (ph), we learned from the tapes. Half of us (ph), I think the staff would just walk away and ignore it. But this was generated in the White House. This was a president behaving deceitfully.

WOODRUFF: And in the beginning, the reporting was considered blasphemous, practically.

MORTON: Yes, yes. Can't question it, but, well, you know, we've had -- we'd had presidents who led us through World War II. Franklin Roosevelt, not only the war the Depression. People took the office very seriously. People took a man like Dwight Eisenhower very seriously, and the notion that the president would just come out and lie to you was dynamite.

WOODRUFF: You've been reading this today about Mark Felt and what he said to "Vanity Fair" magazine. What do you think? I mean, David Gergen said earlier, it does seem plausible to him. What do you think?

MORTON: One of the great rules of Watergate reporting, as you remember, Judy, was you got to have two sources. We have one so far, and he's 91 years old, and I don't know how good his memory is, and, assuming that the other three keep silent, we're not going to know for a while.

WOODRUFF: We're going to keep on, keep on waiting. No, a lot of us have had suspicions. I'm sure have you had suspicions.

MORTON: Oh, I've had a couple of candidates but they seem not to be the ones.

WOODRUFF: They all dropped by the wayside?

MORTON: No, not quite, but...

WOODRUFF: All right, Bruce Morton, who was here and covering the story as it unfolded. Bruce, thank you very much.

MORTON: Thank you.

WOODRUFF: Appreciate it.

WOODRUFF: The economy, Social Security, Iraq -- those were some of the top issues as President Bush faced reporters at the White House this morning. I'll tell you more about the president's news conference when we return.

Plus, the new Deep Throat claims are causing quite a buzz in cyberspace. We'll go inside the blogs to find out what is being said.

And there's also some talk going around about another Bush-Cheney ticket in 2008. Those stories, much more, coming up.

(COMMERCIAL BREAK)

WOODRUFF: President Bush is rejecting talk that he is losing clout early in his second term, and he vows to push ahead with his top priorities. Mr. Bush discussed a wide range of issues at a news conference this morning. With us now, CNN White House correspondent Suzanne Malveax. Hi, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hello, Judy.

Well, President Bush spent much of his 50-minute news conference really trying to dismiss some of the setbacks the administration is experiencing both overseas as well as at home. A very poignant moment came in the news conference when President Bush was confronted with a human rights group report, a report that compared the U.S. facility -- detention facility -- at Guantanamo Bay, Cuba, with a Soviet-era prison, laden with abuse. The president's response...

BUSH: I'm aware there were Amnesty International report, and it's absurd. It's an absurd allegation. The United States is a country that is -- promotes freedom around the world. When there's accusations made about certain actions by our people, they're fully investigated in a transparent way. It's just an absurd allegation.

(END VIDEO CLIP)

MALVEAUX: Judy, the president also addressed the rising insurgency in Iraq. That -- that has claimed about 100 -- rather, 800 people's lives in the last month or so. The president saying that he believes the newly-formed Iraqi government, the people there, can certainly handle it and that at some point, they will be able to take on that challenge.

The president also addressing the number of setbacks in the domestic front. The legislative agenda, not being able to push forward his legislation regarding Social Security, regarding energy, or his judicial nominees.

MALVEAUX: President Bush was also asked, of course, whether or not he agreed with the Secret Service decision not to notify him while he was riding his bicycle when they had -- the White House was evacuated, the Capitol as well, during that security scare that happened some weeks ago. The president saying that he was confident that he agreed. With that decision, however, he was pushed just a little bit, Judy, by a reporter who said, well, he acknowledged that the First Lady has publicly said that she didn't agree with that decision. She was shuttled into a bunker while all of that took place. The president kind of laughed, he shrugged it off. He was asked, do you often disagree with your wife? He says, well, yes, that happens -- Judy.

WOODRUFF: I suppose that's happened in other marriages at different times, too. Suzanne, thank you very much.

MALVEAUX: Thank you.

WOODRUFF: Well, for more now on how the president is faring in pushing his agenda on Capitol Hill, we're joined by CNN congressional correspondent Ed Henry.

Hi, Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Judy, the president clearly was prodding Congress. He was perturbed by the slow pace on Capitol Hill and that frustration comes in marked contrast to the president we saw back in November at his first press conference after the election. At that time, the president was riding high, not just because of his own reelection, but due to increased Republican majorities in the House and Senate. That was supposed to set a glide path for bold reform, everything Suzanne just mentioned, from Social Security to broad tax changes, as well.

But those grand plans, as well as many other initiatives like the energy bill, the nomination of John Bolton, have gotten bogged down, which leads to a natural question. As a lame duck president, has Mr. Bush already started losing momentum on Capitol Hill?

(BEGIN VIDEO CLIP)

BUSH: My attitude toward Congress is -- will be reflected on whether or not they're capable of getting anything done. We got a good budget out of Congress, and we got some legal reform out of Congress. We got Priscilla Owen confirmed in the Senate, which is a positive thing. Looks like we'll get a couple of more judges on the appellate bench confirmed. But I think the standard by which Congress should be judged is whether or not they can get an energy bill. And I think they will.

(END VIDEO CLIP)

HENRY: Two interesting points about that answer. Number one, the president did not lash out at Democrats there. He spoke generally about Congress. A Congress, of course, run by his fellow Republicans. And, secondly, the president made it clear that while he's appreciative, that Republican leaders have scored victories on the budget, legal reform, bankruptcy reform, he's expecting far more.

And this comes on the heels of a blistering editorial in Friday's "Wall Street Journal," which basically declared this Republican Congress has been a disappointment so far. Still, we also heard optimism from the president in that answer, specifically on Social Security. He made the case later in the press conference that his barnstorming tour has already made progress.

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BUSH: You might remember a couple of months ago around this town people were saying it's not a problem. What's he bringing it up for? Nobody sees it as a problem except for him and then all of a sudden, people began to look at the facts and realize that in 2017, Social Security -- the pay-as-you-go system will be in the red. 2042, it's going to be bankrupt.

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HENRY: Still, Republicans on Capitol Hill are a little less upbeat about getting a deal on Social Security. That might have something to do with the fact that congressional Republicans have to face the voters next year while the president does not. And Judy, polls show the majority of the public still is not sold on private accounts. Republicans on the Hill watching those polls very closely.

WOODRUFF: So where is the president getting this optimism from? Because when you talk to people on the Hill, they hem and haw and they're not as positive as the president is.

HENRY: I think he's getting the optimism from himself. He's heard time and time again in the first term of his presidency he could not get things done. He could not get a large tax cut, for example. As soon as he came to office, that he didn't have enough political capital to do it. And he repeatedly has looked at naysayers and said I can get it done.

And we heard again today in this press conference, he compared getting Social Security reform to getting water to cut through a rock. And he said I'm just going to work at it and work at it. And that's what he's doing. He's getting that optimism, I think, from himself. He's done this before, he's proven the naysayers wrong, and he thinks he's going to do it again.

WOODRUFF: How much collaboration is there, Ed, and agreement on strategy between the White House and the Republican leadership in the Congress?

HENRY: I think it's gone a little bit off kilter, in part because of Tom DeLay's ethics woes. We have seen a Republican leadership that is not completely in synche with the White House, in part because they have been distracted. Distracted by DeLay, distracted in the Senate by this fight about the nuclear option, distracted by the John Bolton nomination, which a lot of Republicans did not expect it to become such a firecracker.

And so I think there have been a lot of other side issues. They're clearly still on the same page, but there have been a lot of distractions the Republicans on the Hill were not expecting that have taken them a little off message. WOODRUFF: OK. Ed Henry, who is visiting us at the bureau today. He's usually over at the Capitol. Thank you very much, Ed.

HENRY: Thank you.

WOODRUFF: Appreciate it.

Well the Watergate era, as we call it, was three decades ago, but it's a sizzling topic today on the Internet. When we return, we'll go "Inside the Blogs" to find out what is being said about the new Deep Throat claims. (COMMERCIAL BREAK)

WOODRUFF: Our lead story, "Vanity Fair" magazine revealing that former FBI official W. Mark Felt is identifying himself as being Deep Throat, the source who helped to bring down the Richard Nixon White House. We have not heard a comment officially from "The Washington Post" newspaper, the newspaper that Bob Woodward and Carl Bernstein worked for.

But now "The Post" is saying it will put out a statement on its Web site around the top of the hour. That would be 5:00 Eastern, 2:00 Pacific. So, of course, CNN will monitor that. We're attempting to get as much as we can from "The Washington Post" right now, and soon as that statement's up, we will share it with you.

So, meantime, the new claims about the source who helped bring down President Nixon are causing a lot of buzz in cyberspace. Let's go inside the blogs with CNN political producer Abbi Tatton and Jacki Schechner, our blog reporter. Jacki, so, we're waiting to hear from the "Post."

JACKI SCHECHNER, BLOG REPORTER: Yes, I was just thinking about that. We'll be sure to check in with the bloggers and see how they react on line to that announcement, if that sheds any light on the situation.

They are abuzz with the news of the "Vanity Fair" article that Mark Felt has outed himself as Deep Throat. They are using the immediacy of the internet and research capabilities of the internet to dig into some past articles that did say that Felt was a possibility. We go over to wizbangblog.com. It's Kevin Aylward posting over there. He has a pdf file of the "Vanity Fair" article, so for those of you who would like to go online and download that and take a look at it in full, you can do so.

He's got some past articles that did mention Felt. And he's also got a round up of other right-wing blogs that are talking about it up at the top of his post. He says, "All we need now is confirmation from Woodward or Bernstein. That's what a lot of the blogs are talking about.

Another one, CaptainsQuartersblog.com, calling it the most notorious political who-done-it thing, saying it's come to a climax, but saying there is no resolution which is what we're all talking about, saying that, Woodward and Bernstein, if this was actually accurate, then why does their responsibility for his confidentiality continue? It would end if he's outed himself.

ABBI TATTON, CNN POLITICAL PRODUCER: The fact that Bernstein and Woodward have not committed themselves either way to whether this is true or not is the big discussion. The bloggers want answers and they're looking at it on lots of different sites out there, asking the question, why?

Over here at SayAnythingblog.com, "I'm guessing that it's either because two would like to keep as much of the mystery surrounding their most famous story in place for as long as possible or because Mr. Felt is not the real Deep Throat."

More over at the IndyPundit.com, (ph) here, saying that, interesting that Bernstein won't confirm the source. Is Felt coming clean or cashing in, is the question? The comment sections today are alive and well as people don't have all the answers they want and so they're weighing in there, and the comments -- the comments to that one -- is he cashing in? -- he's 91-years-old. If he's cashing in, I think he would've done it years ago. So, until full confirmation, the bloggers are definitely still going to be discussing whether they think it is Felt or not.

SCHECHNER: Now, there are other stories in the blogs today. We wanted to bring you some of those, as well. You may remember the beginning of the month we talked about the Downing Street memo. It was a document that suggested that President Bush and the Bush administration had plans to go to war with Iraq as early as July of 2002. Now, there is an alliance that's now been put together by Melissa McKewan (ph) over at Shakespeare Sister -- that's shakespearesister.blogspot.com. They're calling it the big brass alliance. She says she's got close to 200 liberal bloggers who have come together right now, and they are supporting Congressman John Conyors and others who want to pursue a former inquiry into the Bush administration's plans in the days and months leading up to the war, actually, the years, now, leading up to the war in Iraq.

So, they are banding together and it's just an example of some of the collaboration and collection of bloggers that we are seeing on the web right now.

TATTON: More collaboration today on a site that was launched just this morning, TPMcafe.com. This is a group blog, a liberal, progressive blog, a place where people can discuss public policy, politics, culture, all kinds of things. It's the brainchild of Josh Marshal. He's been blogging since November of 2000, right when the Florida recount was going on, at talkingpointsmemo.com. Joshua will still be blogging over there.

But the new site here is going to be discussing various issues, specific topics. They're also going to have guest bloggers there. They're announcing over at TPMCafe, today, that former Vice President John Edwards is going to be blogging there. Pull up a chair. This is guest blogging at TPM's cafe table for one. That looks like it's going to be a regular feature. It's a sleek site for liberal bloggers. And, also it looks very much like a business. If you want to advertise on the site =-- lots of ads. Click on this bit here and you can ask for the rate card.

So, bloggers, expanding, the most successful of them setting up companion sites to go with their regular blogs.

SCHECHNER: Now, another site of collaboration that wanted to show you today. Remember when you were a kid and you had to go to Cotillion (ph), the fancy dance where the boys had to learn to take the girls out. Well, today they formed the Cotillion it's a CotillianBall.blogspot.com, and it's a coalition of conservative female bloggers. We start over at CommonSenseRunsWild.typepad.com. It's Beth of My Vast Right-Wing Conspiracy, Jody of Steal the Band Wagon, and then, Jeanette of Common Sense Runs Wild," the three of them, so the were annoyed at people saying, where are all the female bloggers? Where are their voices? Why aren't they being heard?

So, what they did is they put together this collaboration of women. And it's not based on linkage or traffic or anything like that. It's basically just based on a group of women whose voices they liked and postings they liked. So, if you go to the companions that are the actual site itself, cotillion ball.globspot.com. Its got an introduction. Then it has a collection of women who are talking about various things. Just to bring some more female voices out there.

So, Judy, that's just an idea of what is going on in the blogs today. Lots of stuf to talk about, and we are looking forward to what they might say come the "Post" announcement at 5:00 o'clock.

WOODRUFF: And, in fact, I can tell you Jacki and Abbi, we've gotten a little more information from our producer Sasha Johnson, (ph) , saying the "Washington Post" says this news -- there will be some news in it. They are going to put something on their website just about 5:00. And that there will be a story tomorrow in the "Washington Post" and a story written by Bob Woodward that will appear on Thursday in the Washington Post. So we're all watching that website right now.

President Bush cannot run again in 2008, but there's talk of another Bush/Cheney ticket for the next race for the White House. That story straight ahead.

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WOODRUFF: Another Bush/Cheney team in the White House? Well, the chairman of the Republican party says that's a great idea.

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KEN MEHLMAN, RNC CHAIRMAN: I think that we may have another Bush/Cheney ticket, Laura Bush, Lynne Cheney. I think that would be a pretty powerful ticket.

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WOODRUFF: Ken Mehlman speaking. An in-depth interview with the RNC chairman is coming up tomorrow on INSIDE POLITICS. Mr. Mehlman will talk about a wide range of issues including President Bush's popularity and his second-term agenda. That's it for this Tuesday edition of INSIDE POLITICS. I'm Judy Woodruff. Thanks for joing us. Much more on the Deep Throat identity revealed. "CROSSFIRE" coming up right now.

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